An ongoing review of the state’s $2 billion special-education program by Comptroller Thomas DiNapoli’s office so far has found that three private contractors used public money for “inappropriate and unallowable expenses.” That includes improper staff bonuses, billing for no-show jobs and spending public money on landscaping services and flooring for a vacation home.
The investigation has led to felony arresets of four contractors and $610,000 in restitution. The three contractors DiNapoli released audits on today are located in the Bronx, Brooklyn and Troy. In some cases, contractors tried to hide the fraud, while in others, they didn’t, according to DiNapoli, who called the schemes to defraud the state “unconscionable.” Fifteen additional audits are underway. The office began its probe after finding irregularities in financial-disclosure reports.
“This money was intended to give our most vulnerable children the services they needed, instead the money was used for contractors to landscape their second homes or for no-show jobs. Special needs kids were shortchanged by contractors that had figured out how to game the system,” DiNapoli said in a statement.
DiNapoli worked with Manhattan District Attorney Cyrus Vance and Bronx District Attorney Robert Johnson, and he continues to collaborate with state Education Commissioner John King to improve monitoring and prevent future abuse. The comptroller said his ofice has started a training program for special-education providers to detect and combat fraud and encourage reporting of suspected wrongdoing.
The state Education Department provides services to children 3 to 21. Private contractors are reimbursed for expenses by New York City and counties across the state through rates set by the state agency.
DiNapoli’s office has also initiated a training program for special education providers to detect and combat fraud and encourage the reporting of suspected wrongdoing.
“Stealing from children with special needs is reprehensible,” King said in a statement. “Fortunately, the overwhelming majority of pre-k special education providers are committed to serving special needs children honestly and compassionately. We will continue to work with Comptroller DiNapoli and the special ed community to ensure every pre-k special education dollar provides the services our children need.”
These are the three contractors:
— Important Steps Inc. in the Bronx had nearly $250,000 in improper costs in a single year, including more than $3,000 to buy trees, bushes, gravel, carpeting and tiles for the executive director and her husband’s vacation home.
Executive director Janet Reznik and her husband, David Shapiro, have been charged with five felonies, including grand larceny, tampering with public records and filing false documents with the state. They were arraigned in Bronx Criminal Court June 6 and are scheduled to appear in court today.
— Special Education Associates in Brooklyn claimed spent $324,881 for the salary of a no-show executive. Deena Bernstein, the wife of the group’s executive director, was paid as a full-time employee even though she was employed as a full-time dean, professor and department chairwoman for the City University of New York.
There was another $60,857 in improper expenses for the Bernsteins, including $34,010 for vehicle leases, and they violated IRS regulations by hiring their granddaughters, who were 12 and 16, as independent contractors.
Samuel Bernstein pleaded guilty in December to one count of defrauding the government, a class E felony. He paid $610,000 in restitution. Deena Bernstein’s next scheduled court appearance is June 27.
— Capital District Beginnings in Troy inappropriately received reimbursement for the salary of one of its owners/executive directors for providing services to children. She lives full time in a southern state and spent an average of 55 days in New York.
The audit found $831,244 in inappropriate charges for no-show executives, staff bonuses and other costs. More than $40,000 was spent on vehicles, including one for the director, who lives out of the state.